Piyush

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    • Tue Apr 15th 17:34 PM | Rating: 0 0
      Commented on:
      Will Blockbuster Rewire Circuit City - And Itself?
      I havent taken a look at CC's books in a while but is this some sort of a Eddie Lampert style Sears/Kmart real estate driven value proposition?
      I used to live in Richmond right by the CC HQ and knew several people who worked for them but I never got the sense that they owned much of their Real Estate and I am assuming neither does Blockbuster.
      How does this deal make sense? Inbound customer steps into store at CC are dismally low owing to their lack of product selection, knowledgeable staff and dingy stores. Blockbuster is some what similar. I just dont know if this deal makes any sense whatsoever. If you want a video game kiosk in BB, you can invest or lease some and if you want to rent movies at CC, you can more often than not buy them cheaper than you can rent them at CC. Better still use them and return them as non-working!! (that would be shady I must agree)
      Any which way to look at this - BB shareholders are going to get burned, CC shareholders could get some good money for a loooooosing bet they made - hopefully they got in at 3 bucks!
      I cannot imagine CC has not learnt anything from BestBuy's retailing strategy - they have been able to weed out their worst customers and retain their best via best case segmentation and astute individualized reorgs of their stores.. why cant CC do it and do a better job!!

      Cheers,
      P
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    • Thu Mar 20th 17:21 PM | Rating: 0 0
      Commented on:
      Visa Reality Check
      Herb,
      There are two points you overlook when making your case

      a) The growth of plastic around the world, sans US where Visa is a major player has been overlooked. Be it Debit or Credit or Gift Cards, growth in plastic is here to stay and Visa will be one of the beneficiaries of this phenomenon. MasterCard is working overtime to capture the Debit market where it has been a historically marginal player esp. in the US and has been true in all emerging & established economies but Visa still has it beat by a long shot.
      b) The payment system is moving to electronic/plastic/ble... (Chips in Cards, Cards tied to Phones) are set to grow dramatically in the next few years - outside of US, again a large market which makes Visa & MasterCard very attractive buys.
      I agree the above two points are interrelated but there is a subtle difference - inspite of cost of network creation going down dramatically in the last 1.5 decades, no one is building any new ones and governments arent pushing Visa/MC to share theirs like Bandwidth of Telephony carriers anytime soon - all this means Visa & MA are good buys for atleast next 5 years with solid growth prospects.
      Add to that, a certain level of decoupling of emerging economies from US economy, providing counter cyclical cover for Visa/MC over time.

      Piyush
      View article »
    • Thu Mar 6th 11:35 AM | Rating: 0 0
      Commented on:
      It's Time For Economists To Make Way For Pragmatists
      I agree with most of what he has to say here. Banks/Lending institutions are hoarding cash to rebuild the Balance Sheets instead of lending. Like the author, I am no economist and not even a Front End'er in banking but I like to learn. That aside, I have been shouting from roof tops (given the buildings I have access to are only few stories tall) that the liquidity/credit crunch would have been much easier to handle, had the Fed only lowered rates somewhat, ignored the street and forced via NY Fed the banks to loan at the discount window, expanded ofcourse in terms of collateral & time (90 days, ABS & other sound paper) while removing the penalty rates. This would have provided ample liquidity to banks for lending, with no penalty and a breathing room/time long enough for continuing to lend rather than spasming. Other simultaneous actions like T-Auctions would help as well.
      Now we are in a place where, savers like me are penalized while my debt (student loan only) keeps rates constant with no recourse but to vent on sites like this. Helicopter Ben even wrote about this kind of scenario in his thesis & papers - buying growth by printing paper money but wreaking havoc in the inflation equation but is making the mistakes he so eloquently derided.
      The weak dollar is all dandy unless you take stock of the industrial/manufacturi... strength of this country - depleted over last 16 years through lopsided free trade agreements like NAFTA. They need to be fixed via some semblence of renegotiation - reneging/repealing wont do it. SO given lack of past investment in industry, imports are not going to grow dramatically - US has nothing to import!! Chinese are hell bent to keep Renimbi pegged and will do so for the short term, further killing exportability of competing goods if they ever get manufactured here.
      This effect can be seen in the Yield curve as well - the 2 yr yield is lower than the 3 & 6 mo. yields - inflation expectations in short terms are much lower - again 2 reasons China & flight to safety.
      I think no more rate cuts would only work now (i would love rate hike but that would cause panic in a jittery market) with still opportunity to work the discount window & T-Auctions. Let the Fed be the JP Morgan of this day & age and be unafraid to take action.
      On the other hand, let the writedowns flow through - do not intervene in markets and soil opportunities for investment!!
      Well I have ranted enough for today.
      Can reach me at pgoyal77@gmail.com if you think i have structural mistakes in my argument!
      Ciao..
      View article »
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